Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) CEO Warren Buffett has just given away 18.63 million Class “B” shares of his stock, worth nearly $3.2 billion as of this writing. However, this is nothing new: Buffett has given away more than $27.5 billion since 2006. Here are the details about Buffett’s charitable efforts, who’s getting the money, and other billionaires who have decided to follow Buffett’s lead.
Buffett’s charitable pledge
It may surprise you to learn that Warren Buffett has pledged to give away virtually all of his wealth. Buffett originally announced in 2006 that he intended to gradually give away all of his Berkshire Hathaway stock to philanthropic organizations. More than 99% of his wealth will be given away, both during and after his lifetime.
Buffett has decided to give away about 4% of his remaining Berkshire Hathaway shares every year while he’s still alive, and has already given away about 40% of the Berkshire stock he originally held — including his 2017 donation. It’s Buffett’s wish that his money be used for current needs, not held in endowments. After Buffett is gone, he wants the remainder of his Berkshire shares to be completely spent on charitable purposes within 10 years of his estate’s settlement.
To be clear, the 1% of Buffett’s wealth he’s not giving away is still an amount in the hundreds of millions of dollars, so his wife and children will be well taken care of after he’s gone. He says that his children have already been given considerable sums of money and will receive more.
In 2010, Buffett, along with his longtime friends Bill and Melinda Gates, announced The Giving Pledge, in which they formally announced plans to distribute the bulk of their wealth to charity, and encouraged other billionaires to do the same. In Buffett’s pledge letter, he said:
Were we [Buffett and his family] to use more than 1% of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs.
It’s also worth mentioning that Buffett makes other donations to charity, as well. For example, he auctions off a lunch with himself every year to benefit one of his late wife’s favorite charities, and bids typically go into the millions.
Buffett’s latest donation and where it’s going
In July 2017, Buffett donated 18.63 million Class “B” shares of his Berkshire Hathaway stock, which was worth about $3.17 billion at the time the gift was made. The donation is being distributed to the Bill & Melinda Gates Foundation, which will receive about $2.42 billion, as well as four family charities:
- The Susan Thompson Buffett foundation, which is named for Buffett’s late first wife.
- The Howard G. Buffett Foundation, overseen by Buffett’s son Howard.
- The Sherwood Foundation, overseen by Buffett’s daughter Susan.
- The NoVo Foundation, overseen by Buffett’s son Peter.
After the donation, Buffett still owns about 17% of Berkshire’s outstanding shares and remains the world’s fourth-richest person.